Int. Speedway Corp. profits drop, crash claims expected

The charge was taken to raise the Daytona Beach-based company's reserve up to its $1.5 million deductible on general liability insurance claims for the year.

CLAYTON PARKBUSINESS WRITER

DAYTONA BEACH — International Speedway Corp. profits were down in the first quarter in part because of a $1.1 million charge that would help pay claims it expects to receive from the more than 30 fans injured Feb. 23 when a race car at Daytona International Speedway slammed into a fence and sent debris into the crowd. The charge was taken to raise the Daytona Beach-based company's reserve up to its $1.5 million deductible on general liability insurance claims for the year, said Chief Financial Officer Dan Houser in a conference call Thursday with stock analysts. Charles Talbert, a spokesman for the company, told The News-Journal that no claims have been filed yet but "we do expect claims will be filed as a result of this incident potentially in excess of our $1.5 million deductible." International Speedway Corp. officials in the conference call announced the company generated a first-quarter net profit of $13.5 million, down 21 percent from a year ago, despite a slight uptick in revenues, which rose roughly 1 percent to $128.6 million. ISC owns the Speedway and 11 other NASCAR racetracks across the country. While attendance at this year's Daytona 500 was down from the previous year, television viewership for the broadcast of the race rose to the highest level in five years, ISC officials said. The average price of tickets sold for the event also rose 1.4 percent — the first year-over-year increase since 2009."Our solid financial results for the first quarter demonstrate the continued strength of not only our business, but also the motorsports industry," Lesa France Kennedy, the company's chief executive officer, told the stock analysts in the conference call. John Saunders, the company's president, told stock analysts that all of the fans injured during the Nationwide Series DRIVE4COPD 300 race have been treated and discharged and that International Speedway Corp. officials are reviewing safety measures at Daytona International Speedway and the company's other NASCAR tracks. "Fan and competitor safety is of the highest importance to us," Saunders said.Matt Morgan, an attorney with Morgan and Morgan, said the personal injury law firm is representing six fans injured in the Feb. 23 crash but is waiting to determine the full extent of its clients' medical treatment costs before filing claims. "We are hopeful that all entities responsible for our clients' injuries will come to the negotiating table in good faith with the intent to make a reasonable settlement," he said. One client, the only one Morgan would identify by name, is Whitney Turner, a single mother from Indiana who suffered multiple injuries to her right leg that will require multiple surgeries costing "hundreds of thousands of dollars" to treat, he said. Morgan said Turner, who was initially treated at Halifax Health Medical Center, is now back at her home in Tell City, Ind., but because she is confined to her bed she has been unable to work and faces the prospect of losing her marketing job. She is the mother of a 5-year-old child, he said. Having taken the charge to its first-quarter earnings to meet its insurance deductible, any settlement claims paid out to injured fans would be covered not by International Speedway Corp. but by its third-party insurers, Houser told The News-Journal. ISC officials also said the company is continuing its efforts to lobby the state to provide the company with economic incentives that would include a sales tax rebate — potentially more than $60 million over 30 years — to help offset the costs of its planned major redevelopment of Daytona International Speedway. The project would include a redesign and expansion of the Speedway's five entrances, as well as a redevelopment of the track's nearly milelong frontstretch grandstand that would include wider, more comfortable seats and more restrooms and concession stands. "It is vital that we continue to elevate this brand (the Daytona 500) to ensure that it remains the world center of racing," said Saunders. The decision on whether to proceed with the project would depend on several factors including the state of the U.S. economy, but Saunders said "we are hopeful for a successful outcome in the very near future" regarding efforts to secure the sales tax rebate from the state, which he described as "the very same benefit that has benefited Florida's other professional sports venues for over two decades." Another potential factor is International Speedway Corp.'s efforts to sell land it owns in Staten Island, N.Y., that at one time it considered as a site for a potential new motorsports racetrack. Houser said the company has been in exclusive talks for the past several months with a potential buyer for that property and he was "cautiously optimistic" a sale agreement could be reached later this year. In Wall Street trading Thursday, International Speedway Corp.'s stock price (NASDAQ: ISCA) rose 26 cents to close at $33.05 a share.